Texas remains one of the largest markets for personal loans in the U.S. Borrowers continue to seek funds despite higher interest rates. In 2025, clear regional differences define how Texans access and repay personal loans. This report from 1F Cash Advance provides exclusive insight into the Texas consumer credit market and analyzes key trends and lender behavior.
Key Findings
- The average two‑year bank personal loan APR in Texas tracks the U.S. figure at roughly 12.3%, while three‑year credit‑union loans hover near 11%.
- New consumer‑loan dollars fell 15% in 2023 as higher rates cooled demand, yet lenders still booked $9.2 billion statewide.
- Personal loan delinquency (60+ days) eased to 3.57% by Q4 2024, down from 3.90% a year earlier.
- San Antonio ranks first in the nation: one‑third of adults there have a personal loan, with an average balance above $5,100.
Interest Rates Across Texas in 2025
Interest rates for personal loans in Texas have climbed steadily since 2022. By late 2024, banks offered an average APR of about 12.3% for 2-year loans. Credit unions typically provided better rates, averaging around 10.8% APR for 3-year terms.
Borrowers with average credit scores face rates between 15% and 19%, while subprime borrowers often see rates above 20%. These high rates reflect recent Federal Reserve actions and lender caution due to credit risk.
Personal Loan Volumes and Demand Trends
A sharp jump in borrowing costs cut new originations during 2023. The 2024 Report on Availability, Quality, and Pricing of Certain Financial Services and Consumer Loan Products shows that OCCC-licensed lenders funded 11.37 million loans worth $9.2 billion, down one-sixth from 2022. Nonetheless, balances outstanding hit record highs through 2024 as earlier‑year loans aged. Growth stayed strongest around Austin and the Permian Basin, where rising wages offset the pressure of the rate. By early 2025, Texans carried an estimated $28–$30 billion in unsecured personal loan debt, mostly concentrated in the four largest metros.
Smaller cities and rural areas also show significant loan use, primarily through finance companies and online lenders serving subprime borrowers.
Delinquency Rates and Credit Risk by Region
Nationwide, personal loan delinquency improved slightly in 2024; Texas followed the same trend. The statewide 60‑day‑plus rate now sits just above 4%, close to the national 3.57% mark. Banks still report the lowest risk—around 2% of late balances—while traditional finance companies approach 7%.
Delinquency is highest in South, West, and East Texas, where incomes trail the state average, and borrowers rely more on high-cost installment loans.
Types of Lenders Serving Texas Borrowers
Texans primarily obtain personal loans through various lender types, including banks, credit unions, fintech lenders, storefront finance companies, and dedicated local 1F Cash Advance offices in Texas. Here’s a more detailed breakdown:
- Banks: dominate prime lending in DFW, Houston, and Austin. They target prime borrowers and offer rates from 8% to 24% APR.
- Credit unions: strong in San Antonio, Central Texas, and border cities; credit unions often provide lower rates (around 11% APR) due to their nonprofit model.
- Fintech and partner banks: widely serve rural areas via online platforms. They are popular statewide, serving a wide credit spectrum with APRs ranging from 7% to 36%.
- Storefront finance companies and Credit Access Businesses: dense in South and East Texas. These lenders typically cater to subprime borrowers, charging higher interest rates (often above 20%).
Competition is strongest in urban centers, helping hold rates down. In rural regions, choice is limited, often to a single community bank or local finance shop.
Regional Breakdown of the Texas Loan Market
Here’s how the lending market works in different regions of Texas:
North Texas (Dallas–Fort Worth)
| Loan Volume and Borrower Profile | Interest Rate Environment | Delinquency Trends | Dominant Types of Lenders |
| North Texas’ population has grown to 8.3 million, which explains the state’s leading position in lending volume. About 26% of DFW residents hold personal loans, with average balances around $4,261. | Prime borrowers pay rates starting at about 10%, while those with weaker credit face rates in the mid-20s or higher. Banks and fintech lenders dominate this region. | North Texas maintains moderate delinquency rates of around 3–4%, aided by a strong local job market. | Banks (Chase, Wells Fargo) and fintech platforms serve most borrowers. Credit unions play a smaller role here. |
Gulf Coast Region (Houston and Southeast Texas)
| Borrowing Trends and Volumes | Interest Rate Dynamics | Regional Delinquency Rates | Key Lender Types |
| Around 29% of Houston residents have personal loans. Their average balances are slightly higher ($4,473) than in North Texas. | Interest rates range widely here (13–20% typically). A sizable subprime borrower base results in many consumers paying higher-end rates. | Delinquencies in Houston are higher, averaging around 4–5%. Subprime lenders and payday loans contribute significantly to defaults. | Houston sees a balanced mix: banks for prime borrowers, credit unions for members, and finance companies or fintech lenders for subprime customers. |
Central Texas (Austin and Surroundings)
| Personal Loan Demand | Interest Rates and Borrower Credit Quality | Delinquency Levels | Lender Landscape |
| About 26% of residents use personal loans, typically for larger needs like home improvements or debt refinancing. Austin’s average loan balance reaches around $4,638. | Austin borrowers typically have strong credit scores (around 697). As a result, they often secure rates between 7% and 15% APR from fintechs or credit unions. | Central Texas experiences the lowest delinquency rates (2–3%), reflecting better incomes and healthier borrower finances. | Fintech companies and credit unions dominate, providing attractive rates and terms. Banks have less market share here compared to other urban areas. |
South Texas (San Antonio and Rio Grande Valley)
| Loan Usage and Market Size | Interest Rates and Borrower Risks | Delinquency Challenges | Major Lenders and Alternatives |
| Personal loan use is high here, around 33%—the highest in Texas. Average loan balances in San Antonio reach $5,142. | Due to lower credit scores and incomes, borrowers frequently pay rates above 20% APR. Payday and high-cost installment loans are common. | South Texas faces the highest delinquency rates, approximately 6% or more. Many borrowers struggle with repayments, increasing lender caution. | Credit unions like RBFCU provide competitive rates, but alternative finance and online lenders dominate the subprime segment. |
West Texas (El Paso and Panhandle Region)
| Loan Market Characteristics | Interest Rate Patterns | Regional Delinquency Outlook | Available Lending Options |
| West Texas has moderate personal loan demand, representing 5–10% of Texas balances. Borrowers often use loans for emergencies or basic needs. | Limited local banking options push many West Texans toward online or high-cost lenders. Interest rates often exceed 18%, especially in rural areas. | Delinquencies remain higher (around 4–6%) due to fluctuating local economies, especially in oil-dependent towns. | Community banks, credit unions (e.g., GECU in El Paso), and fintech lenders provide most personal loans. Remote areas rely heavily on online platforms. |
East Texas (Tyler, Longview, Beaumont Area)
| Market Overview and Loan Needs | Interest Rates and Affordability | Delinquency Situation | Local Lender Types and Accessibility |
| Although this region has smaller loan volumes, personal loans remain crucial for managing everyday expenses, medical bills, and debt consolidation. | Rates in East Texas frequently reach between 20–30% due to limited lender competition and lower credit scores. | East Texas has high delinquency (about 5–7%) due to ongoing economic pressures and fewer financial resources. | Finance companies dominate here, often offering secured or high-cost loans. Local credit unions provide affordable loans, but their reach is limited. Online lending is increasing as residents seek alternatives. |
Key Regional Differences and Anomalies
Several regions display unique patterns. San Antonio stands out for heavy personal loan use and high delinquency. Austin enjoys better credit quality and low defaults. Tracking the credit health of Houston residents shows that high loan usage and mixed borrower quality remain notable.
Interest rates show minimal variation by location, but borrower credit scores heavily influence loan affordability across all regions.
Forecast Loan Trend for 2026
With inflation easing and the Fed expected to cut rates by 75 basis points, APRs may decline by 1–1.5% by late 2026. Demand will likely return first in North and Central Texas, while South and East Texas remain cautious. Delinquency should stay stable unless oil prices fall sharply in West Texas.
Conclusion
The Texas personal loan market in 2025 is diverse and regionally complex. High rates, stable demand, and varying credit risks shape lender behavior and borrower outcomes. Understanding these factors can help Texans make smarter borrowing decisions in a challenging financial environment.
About the Author
Michael Lefler, Financial Expert at 1F Cash Advance, holds an MBA from Southwest Minnesota State University and is a Certified Financial Planner (CFP). With over 15 years in lending and financial planning, he helps consumers navigate loans clearly and effectively.
